There are fewer young people working than at any time in the past two decades, according to figures which show that one in five 16- to 24-year-olds are unemployed.

Figures from the Office for National Statistics show the "inactive" population – which comprises young people who are neither working nor unemployed – stands at nearly 3 million, the highest level since the data was first collected in 1992. The analysis says two-thirds of these 16- to 24-year-olds are staying on in education, perhaps to stave off unemployment.

This is the first time that the inactive population – which includes people who are in education, looking after family, retired, or sick and disabled – has been broken down and analysed in this way. It shows that 77.4% of them are now students, up nearly 3% on the same time in 2008 just before the recession hit.

ONS statistician Jamie Jenkins says the number of 16- to 24-year-olds in the inactive group is now so high it has pushed up the traditional unemployment percentage rate by making the workforce smaller.

"The difference has widened because of the recession," he said. "And the reason is a lot more young people have chosen to stay in education."

Meanwhile, 40% of those working are in what the ONS defines as "elementary" or "service jobs", ie working in bars or shops.

The total number of young people not in education, employment or training is also at a record high and nearing a million. The figures show also that Wales has the highest proportion of unemployed young people, 22.5% of 16-24s.

The picture for 16- to 17-year-olds is bleaker still. When Labour came into power in 1997, around half of 16- to 17-year-olds were working. Now it's just 23.3%, the lowest since figures were collected.

The government has been criticised for its abandonment of the Educational Maintenance Allowance (EMA), which helps poorer students into further education with a £30 per week grant. The Education Select Committee reported this month that the cuts and its replacement by a new bursary, were "rushed and ill-thought through reforms".

The NUS president, Liam Burns, says the figures show the rise in tuition fees and the scrapping of the EMA will "slam the door of education shut to those who could benefit most, when very few other doors remain open".